RUSH: Walt in Glendale, Arizona, it’s great to have you on the program. Hi.
CALLER: Mega dittos, Rush.
RUSH: Thank you.
CALLER: It’s interesting that today they’re going after Goldman Sachs and they’re slapping them around, but a year ago in March they sold IndyMac bank to who else but George Soros and John Paulson along with a couple of other people.
RUSH: Yes. You know, I’m glad you brought this up because that’s the thing. Remember who got that ball rolling.
CALLER: Yes, Chuck Schumer.
RUSH: Chuck-U Schumer who goes public with how IndyMac is not solvent, it’s a big problem. He created a run on the bank. Guess who gets in there and buys it? You’re exactly right: George Soros and John Paulson, who is also the hedge fund guy who made the billion dollars here shorting the collateralized debt obligations of Goldman.
CALLER: And it was a private sale, too, not a stock sale. There are no stockholders, and in the first nine months, they made $1.6 billion — and if you figure that, that’s about a million dollars an hour.
CALLER: So I’m getting slapped around a little bit, I’ll take a million dollars an hour.
RUSH: Well, thing about this, too, is that we’re always told the Republicans all this insider trading stuff, profiting here — and look who’s involved in all this. George Soros is by no means a Republican, and I don’t know about Paulson, but I don’t think he cares. We know that Obama is not. This is corporate cronyism — and that may not be an apt description of what all’s going on here.
CALLER: If you look at the other people that bought it, one guy had 17 years at Goldman Sachs and went out and started his own management fund and the other one had 20 years at Goldman Sachs. The problem is these people to me — I’m an Ayn Rand capitalist — aren’t producing something. But I still think Wall Street they provide a real service. It’s a marketplace. As long as the marketplace is a fair marketplace then it helps the economy completely. I hate this thing about ‘Wall Street versus Main Street’ because Wall Street is really important in our overall economic strength. It’s when someone has an advantage — and usually the government provides that — that’s where it’s unfair, and that’s where it’s not capitalism. I don’t even want to call it ‘crony capitalism.’ It’s fraud, basically.
RUSH: Well, okay. I get your point. I get your point on that. What it is is class warfare is what’s happening here.
CALLER: Oh, yeah.
RUSH: It’s a class warfare strategy which does nothing more than advance liberalism.
CALLER: But, Rush, where are the reporters? This is a Pulitzer Prize. Here you have George Soros. You were talking about the British thing. That was September 6, 2002, when he made $1.1 billion in one day. It was the biggest profit on the Forex exchange ever and that was the day — it’s called ‘Black Wednesday’ in Britain because that’s the day — the British pound died and he basically took $10 billion and shorted the pound because it was weak and he knew it was weak and that’s what you do if you want to make a lot of money. He knew that the British government was not going to put up the money to change that, and I don’t think they realized they had someone out there that could do this. Along with him, with other people, too, when he started is to short it. But he made $1.1 billion in one day just shorting the pound.
RUSH: Well, what was your question about that? You said where is who on that?
CALLER: Where are the reporters?
CALLER: Just think about it, Rush. If you connected the dots here —
CALLER: — just on IndyMac, it’s a great story. It’s an interesting story. Why can’t they? You know, you take the Democrats, and they’re making this money with IndyMac.
RUSH: That’s like asking, ‘Why doesn’t Satan tell us the truth about hell?’
CALLER: Yeah. (laughing)
RUSH: It’s not going to happen.
CALLER: Well, I have a reporter from the Times who’s been following this because I was an IndyMac customer. In fact, after Chuck Schumer wrote that letter on a Thursday my mortgage was due and I went to the bank the following Monday after the FDIC had taken it over. There was a line around the block with people taking their money out, and I was putting money in. These people at IndyMac were shocked. They didn’t understand what had happened. They said, ‘Why are we being picked out for this?’ because at that point they felt they were just a good bank. And, you know, there was —
RUSH: I’m sure Angelo Mozilo is trying to figure out, ‘What the hell happened here?’
CALLER: Yeah. (laughing)
RUSH: ‘I gave Dodd his favorable mortgage. I gave all these guys low-rate mortgages and look at me! I’m outta work and I’m destroyed. What happened to me?’
CALLER: Yeah. Another thing, I have a friend who is in the bank, and I’m in the construction business, and we can’t get loans here, and I asked him, ‘What about construction loans?’ and they said, ‘Oh, we stopped giving those a long time ago.’ So the question is: How can you make $1.6 billion in nine months without giving loans to people? There’s another story in there. I’ve just heard some rumors on how this deal went through with the FDIC, but still it’s hard to believe that you took a bank that Chuck Schumer killed and that you somehow can make $1.6 billion in the first nine months.
CALLER: I mean, how does that happen?
RUSH: Well, it’s not too hard to do when the SEC investigators are watching porno movies on the Internet in their offices.
RUSH: Salt Lake City, John, welcome, sir, to the EIB Network. It’s nice to have you with us.
CALLER: Thank you, Rush. I appreciate you taking my call.
RUSH: You bet.
CALLER: Hey just one thing I noticed with this TARP thing and the things that were going on. A good friend of ours, he was an entrepreneur, had great credit, and he had just under a hundred thousand in the bank to make payments on the line of credit that he bought some land he was going to develop it and so forth. Coincidental with TARP, the bank used its 30-day call privilege, which I guess most lines of credit have. So they called the 30-day call and said, ‘We need to have this money.’ So basically what ended up happening is they tried to negotiate but the bank declared it ‘uncollectable,’ and then of course foreclosed on the land. I’m just wondering: How many other people out there had their lines of credit killed because TARP came out and they were able to get rid of some of these troubled assets — things that they felt might not be well — and then rather than work with the customers, just — just clean ’em out, put them into bankruptcy and then, you know, do whatever they want with that money.
RUSH: The point is what? The point is that TARP allowed…?
CALLER: The point is they wouldn’t have foreclosed on the land had the bank had to work with them. But with the government backing the things they can go through their books and say, ‘Well, I don’t think this loan is that great, I’m going to collect and I’m going to make you pull the loan back now.’
RUSH: Well, this is anecdotal, so I don’t know how widespread this was.
CALLER: Well, I just felt that a lot of folks… You know, my wife’s in a business that deals with a lot of businesses and we find that a lot of these things were happening. Maybe it was anecdotal but I find it very interesting that because of the bailout and because of those things a lot of entrepreneurs and the smaller businesses got all their lines of credit jacked.
RUSH: Well, when I say ‘anecdotal,’ I don’t know if this was systematic. I mean, you might be able to tell me 25 or 30 people it happened to, but I don’t know from that that we can extrapolate that this became active bank policy undercover, so to speak. The point here is that the TARP bailout allowed banks to get rid of what they considered some risky stuff and they ended up putting a lot of people in big financial trouble, and had it not been for the TARP bailout, that wouldn’t have happened. So once again, your point is the government steps in ostensibly to help solve a major crisis, and they created one at the same time.
CALLER: Well, I think so, and that’s exactly what happened to these folks — and, you know, they’re wiped out. And it’s unfortunate for them, and then also these other businesses that were trying to expand or try to get working capital to be able to expand and create jobs, they can’t get the loans to go forward and go.
RUSH: Well, I know that’s been a problem. When it comes to the loans, most — up until recently and I don’t know if this has changed, most — of what I had heard, most businesses didn’t want to borrow any money. There was no need to. They weren’t growing. I know that it was tough to get them anyway, and the people you’re talking about would have practically been impossible for them to get a loan if they’d had a loan called and they were unable to pay it. It’s an unfortunate circumstance, but this is what happens when you have meddling — when the referee, the regulator, the government, starts playing the game rather than regulating it.